The average UK house price reached a record high last month, according to Halifax.
The UK’s largest mortgage lender said the average price hit £293,999 in October, surpassing a peak of £293,507 that was reached in June 2022.
Halifax said it expected prices to continue to rise at a “modest pace” for the next few months.
However, it warned that mortgage costs could remain “higher for longer” following last week’s Budget.
Following the Budget, which included plans to borrow and spend billions of pounds, financial markets expect the Bank of England to cut rates more slowly than previously anticipated.
However, the Bank is still expected to cut its key rate to 4.75% from 5% later on Thursday.
Halifax said house prices edged up by 0.2% in October, meaning property values have now increased for four months in a row.
House prices are up 3.9% from a year earlier, Halifax said, which is a slight decrease from the 4.6% annual increase seen in September.
Commenting on the new record high, Amanda Bryden, head of mortgages at Halifax, said: “That house prices have reached these heights again in the current economic climate may come as a surprise to many, but perhaps more noteworthy is that they didn’t fall very far in the first place.
“Despite the headwind of higher interest rates, house prices have mostly levelled off over the past two and a half years, recording a +0.2% increase overall.”
She added that Budget announcements such as higher stamp duty for second home buyers and a return to previous thresholds for first-time buyers could hit demand for properties.
However, it she added that market activity had been improving, with the number of new mortgages agreed recently hitting the highest level for two years.
David Stirling, an independent financial adviser at Mint Mortgages & Protection, said: “Estate agents are busy even in a higher interest rate environment and mortgage applications and approvals are still strong.”
London remains the most expensive place in the UK to buy a house.
The average property there now costs £543,308, which is up 3.5% compared to last year, the Halifax said.
Northern Ireland has maintained its record for the strongest annual house price growth in the UK.
The average price of a property there is now £204,242.
In England, the North West region saw the strongest growth with prices up 5.9% over the last year making the average house cost £235,587.
House prices in Wales also saw a strong growth, up 5.6% compared to last year, with homes now costing an average of £225,543.
In Scotland, a typical property now costs £206,480, which is up 1.9% compared to 2023.
